With roughly $1.1 billion invested in the fossil fuel industry, the University of Michigan is in the ethically indefensible position of directly funding the climate crisis and the disruption of basic food systems and climate patterns across the globe, driving a humanitarian crisis on a massive scale.

In February 2020, the Regents acknowledged the moral imperative to “disrupt the flow of money to the fossil fuel industry” and announced a freeze on new fossil fuel investments until new policy could be developed. That decision was made only after years of devoted organizing from students, faculty, and staff and remains a temporary stay, with no explicit policy to ensure that endowment funds actually align with human rights and the University’s own stated values.

Next week, the Regents are meeting with experts and community members to decide whether and how to proceed with divestment of the university’s endowment from the fossil fuel industry. They must hear that the U-M community will not accept half measures. We call for:

Complete divestment from the fossil fuel industry in no more than 5 years

Divestment is not a binary decision; it comes in many forms, and it is crucial that U-M divest meaningfully. Some institutions only divest from coal, letting oil and natural gas off the hook; others only divest from the largest publicly-traded fossil fuel companies, which would not encompass the vast majority of U-M’s fossil fuel investments.The science is clear that all forms of fossil fuels must be rapidly phased out. That is why we call on U-M to divest from all companies for whom a non-negligible portion of their business is to explore for, extract, process, refine, or transmit coal, oil, or gas; or who primarily service companies that fit the above definition; as well as utilities that burn fossil fuels to produce electricity. It is also critical that U-M divest expediently. U-M must model the kind of urgent harm reduction necessary to protect ourselves from the worst impacts of the climate crisis. That is why U-M must commit to being fully divested from the fossil fuel industry in five years, as recommended by 350.org.

Reinvestment in industries that advance a just transition

Divestment from the fossil fuel industry is a critical first step; it is necessary but insufficient. To maximize our impact and reorient the university’s endowment to serving the public good, divestment must be paired with a commitment to reinvestment of this capital in:
Initiatives that align with the University’s obligation as a public institution to serve the state of Michigan and the broader public good
Initiatives that advance the goals of a just, global transition away from fossil fuels
The development of infrastructure and programs that promote community autonomy and resilience to the impacts of climate change
Research, development, and equitable distribution of technologies that will accelerate the transition toward a clean energy future

Structural changes to the investment decision-making process that will ensure U-M uses its endowment to truly uphold the university’s mission to “serve the people of Michigan and the world”

Complete divestment from the fossil fuel industry is of paramount importance. However, as with Apartheid South Africa and the tobacco industry, the University is only considering withdrawing its funds after decades (and millions of dollars) of investing in these egregious industries that profit at the expense of basic human dignity and health. Post hoc, piecemeal divestment decisions do not address the structural deficiencies that led U-M to finance such immoral entities in the first place, or the harm it perpetuated; it is unacceptable for U-M to continue using profit as the sole consideration for investment decisions.

U-M must implement ethical guidelines that ensure investments are not detrimental to human rights and well-being. Far from a radical proposition, over half of all higher-ed endowment assets undergo screening for social responsibility. U-M should immediately form a Standing Committee for Responsible Investment (SCRI) with responsibilities including the standardization of ethical considerations for new and existing endowment investments, the review of new investment and divestment proposals based on policy (e.g. University of Washington and Harvard), and recommendations regarding shareholder engagement (e.g. Columbia). Members of the SCRI should come from diverse constituencies across all three campuses—students, faculty, staff, and community members unaffiliated with U-M—and be selected democratically or via representative governmental organizations.

This Monday (Feb 15th), advocates will present directly to the regents, urging them to adopt these changes to endowment policy. It is imperative that we (1) demonstrate community support for an ethical endowment, and (2) hold them accountable to following through with rapid implementation of a fossil fuel divestment policy that adheres to these three critical criteria.